Strategic human resource management ABUQAYYAS · Strategic human resource management is a complex...

Strategic Human Resource ManagementSHRMSHRM

Dr. Abdelfattah ABUQAYYASTelecom/HR Consultant

CITC - KSATelephone: +966 1 461 8076

Fax: +966 1 461 8206Mobile: +966 556642230

15th Annual Meeting of the Arab Network for HRM/D Sana’a – Yemen, 1-3 December 2007

Strategic human resource management is a complex process

What is Strategic Human Resource Management?

Strategic human resource management is a complex process which is constantly evolving and being studied and discussed by academics and commentators.by academics and commentators.Its definition and relationships with other aspects of business planning and strategy is not absolute and opinion varies p g gy pbetween writers. CIPD definition : Strategic HRM is the key to improved business performanceStrategic HRM can be regarded as a general approach to the t t i t f h i d ithstrategic management of human resources in accordance with

the intentions of the organization on the future direction it wants to take


to take.

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Strategic HRM is concerned with longer term people


Strategic HRM is concerned with longer-term people issues and macro-concerns about structure, quality, culture values commitment and matching resourcesculture, values, commitment and matching resources to future need. S fStrategic HRM has been also defined as:

All those activities affecting the behaviour of individuals in h i ff f l d i l h i dtheir efforts to formulate and implement the strategic needs of businessThe pattern of planned h man reso rce deplo ments andThe pattern of planned human resource deployments and activities intended to enable the forms to achieve its goals

15th Annual Meeting of the Arab Network for HRM/D Sana’a – Yemen, 1-3 December 2007 3

Strategic HRM can encompass a number of HR strategies


Strategic HRM can encompass a number of HR strategies. There may be strategies to deliver fair and equitable reward, to improve performance or to streamline structure….etcimprove performance or to streamline structure….etc

However, in themselves these strategies are not strategic HRM.

Strategic HRM is the overall framework which determines the gshape and delivery of the individual strategies. Strategic HRM is concerned with explaining how HRM influences organizational performance. Strategy is not the same as strategic plans.

Strategic planning is the formal process that takes place, usually in larger organizations, defining how things will be done.


Strategy exists in all organizations even though it may


Strategy exists in all organizations even though it may not be written down and articulated. It defines the organization's behaviour and how it tries to cope withorganization's behaviour and how it tries to cope with its environment. SStrategic HRM is based on HRM principles incorporating the concept of strategy. So if HRM is a

h h h f lcoherent approach to the management of people, strategic HRM now implies that what is done on a

l d th t i t t i ti l l ithplanned way that integrates organizational goals with policies and action sequences.


A good business strategy one which is likely to succeed is informed by

Strategic HRM and Business StrategyA good business strategy, one which is likely to succeed, is informed by people factors. One of the driving factors behind the evaluation and reporting of human capital data is the need for better information to feed into the business strategy formulation process. In the majority of organizations people are now the biggest asset. TheIn the majority of organizations people are now the biggest asset. The knowledge, skills and abilities have to be deployed and used to the maximum effect if the organization is to create value.The intangible value of an organization which lies in the people it employs isThe intangible value of an organization which lies in the people it employs is gaining recognition by accountants and investors, and it is generally now accepted that this has implications for long term sustained performance.

It is therefore too simplistic to say that strategic human resource management stems from the business strategy.


Strategic HRM and Business Strategy must be mutually

Strategic HRM and Business Strategy

Strategic HRM and Business Strategy must be mutually informative. The way in which people are managed, motivated and deployed, and the availability of skills and knowledge willand deployed, and the availability of skills and knowledge will all shape the business strategy. It is now more common to find business strategies which are ginextricably linked with and incorporated into strategic HRM, defining the management of all resources within the

i tiorganization.Individual HR strategies may then be shaped by the business strategy So if the business strategy is about improvingstrategy. So if the business strategy is about improving customer service this may be translated into training plans or performance improvement plans


performance improvement plans

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Strategic HRM and human capital management (HCM) are one and the

Strategic HRM and Human Capital ManagementStrategic HRM and human capital management (HCM) are one and the same thing, and indeed the concept of strategic HRM matches that of the broader definition of HCM quite well.

organizational level - because strategies involve decisions about key goals, major policies and the allocation of resources they tend to be formulated at the top.focus - strategies are business-driven and focus on organizational effectiveness; thus people are viewed primarily as resources to be managed toward the achievement of strategic business goalsmanaged toward the achievement of strategic business goals.framework - strategies by their very nature provide unifying frameworks which are at once broad, contingency-based and integrative. They incorporate a full complement of HR goals and activities designed specifically to fit extant environments and to be mutually reinforcing or synergistic.


This argument has been based on the fact that both

Strategic HRM and Human Capital Management

This argument has been based on the fact that both Strategic HRM and HCM rest on the assumption that:

P l t t d t th th t dPeople are treated as assets rather than costs and Both focus on the importance of adopting an integrated and strategic approach to managing people which is the concernstrategic approach to managing people which is the concern of all the stakeholders in an organization.

The concept of human capital management (HCM)The concept of human capital management (HCM) complements and strengthens the concept of strategic HRM rather than replaces itHRM rather than replaces it.


HCM complement s and integrates Strategic HRM by:


HCM complement s and integrates Strategic HRM by:Drawing attention to the significance of ‘management through measurement’ the aim being to establish a clearthrough measurement , the aim being to establish a clear line of sight between HR interventions and organizational success.success. Providing guidance on what to measure, how to measure and how to report on the outcomes of measurement pUnderlining the importance of using the measurements to prove that superior people management is delivering superior results and to indicate the direction in which HR strategy needs to go.


HCM complement s and integrates Strategic HRM by:


HCM complement s and integrates Strategic HRM by:Reinforcing attention on the need to base HRM strategies and processes on the requirement to create value throughand processes on the requirement to create value through people and thus further the achievement of organizational goalsgoals Defining the link between HRM and business strategy Strengthening the HRM belief that people are assets ratherStrengthening the HRM belief that people are assets rather than costs Emphasizing role of HR specialists as business partners.p g p p


Hence both HCM and HRM can be regarded as vital


Hence both HCM and HRM can be regarded as vital components in the process of people management and both form the basis for achieving human capital advantage through aform the basis for achieving human capital advantage through a resource-based strategy. An alternative way of looking at the relationship between y g pstrategic HRM and human capital is in terms of the conversion of human capital into organizational value. Human capital evaluation is useful in that it provides information about the current and potential capabilities of human capital to inform the development of strategyinform the development of strategy.


Business success will be achieved if the organizationStrategic HRM and Human Capital Management

Business success will be achieved if the organization is successful at managing this human capital to achieve this potential and embed it in products andachieve this potential and embed it in products and services which have a market value. S fStrategic HRM could therefore be viewed as the defining framework within which these evaluation,

i d k l dreporting and management process take place and ensure that they are iterative and mutually reinforcing. Human capital therefore informs and in turn is shaped by strategic HRM but it does not replace it.


Practices alone do not create business performance They can

Strategic HRM and Business Performance Practices alone do not create business performance. They can create ‘human capital’ or a set of individuals who are highly skilled, highly motivated.skilled, highly motivated.This will only feed through into higher levels of business performance if these individuals have positive management p p grelationships with their superiors in a supportive environment with strong values.All these factors will promote ‘discretionary behaviour’, the willingness of the individual to perform above the minimum or give extra effortgive extra effort. It is this discretionary behaviour that makes the difference to organizational performance


organizational performance.

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The ‘people and performance model’ emphasized the importance of

Strategic HRM and Business Performance The people and performance model emphasized the importance of individual HR strategies which must fit in a strategic framework which incorporates both people and business issues. It is useful for all organizations to manage their people within coherent framework which reflect the business strategyThey can ensure that the various aspects of people management areThey can ensure that the various aspects of people management are mutually reinforcing in developing the performance and behaviors necessary to achieve business success. There is not single HRM strategy that will deliver success in all situationThere is not single HRM strategy that will deliver success in all situation.Organizations need to define a strategy which is unique to their own situation in terms of context, goals, and the demands of organizational stakeholders.


A company is known by the

SHRM: Aligning with the MissionA company is known by the

people it keeps.Human resources management alignment means to integrate decisions about people withdecisions about people with decisions about the results an organization is trying to obtain.HRM alignment is the ultimate level of HRM accountability asof HRM accountability, as demonstrated in the Hierarchy of Accountability.While HRM accountability must b i ith b i l l li itbegin with basic legal compliance, it ultimately encompasses all four levels of the pyramid, including demonstrating how HRM supports achievement of the agency strategicachievement of the agency strategic goals.


Strategic Planning

You got to be careful if you don't know where you're going, because you might not get there.

Strategic planning allows agencies to map out where they areStrategic planning allows agencies to map out where they are, where they want to go, and how they plan to get there.The strategic planning process varies from agency to agency.The strategic planning process varies from agency to agency.The HRM is an integral part of how an agency is going to achieve its mission goals. Without people, there is no one to do the work; therefore, integrating HRM into the agency strategic plan is the first step in aligning it with the mission.Full HRM integration into agency strategic results in having theFull HRM integration into agency strategic results in having the right people, with the right skills, in the right positions to carry out the agency mission.


Typical Planning Process


Well done is better than well said

Strategic ImplementationWell done is better than well said.

Strategic implementation of HRM means performing activities that support agency mission accomplishment and measuring how well pp g y p gthose activities contribute to achieving agency strategic goals.Staffing, development, and employee relations are important HR

i i i h k diff l li hactivities that make a difference to agency goal accomplishment.However, there are other areas in which HR contribute to and align with mission accomplishment such as the followings:with mission accomplishment, such as the followings:

Agency Reorganizations:Workforce Planning:gLinking Performance Management to Mission Accomplishment:HR Self-Assessment:


If you’re not keeping score you’re only practicing

Strategic Implementation - HRM MeasurementIf you re not keeping score, you re only practicing.

HR can only determine its value to the organization by measuring it.measuring it.There are quite a few interesting approaches some agencies are using to measure their HRM performance.g p

Benchmarking is a systematic process of measuring an organization’s products, services, and practices against those of a like organization that is a recognized leader in the studied area.eade t e stud ed a eaThe Balanced Scorecard is a framework many agencies are using to translate strategy into operational terms by measuring a full range of perspectives: financial, customer, internal, and learning and growth.financial, customer, internal, and learning and growth.Activity Based Costing (ABC) is a method of cost management that determines the true cost, including overhead, for a service or product.


HR and management need to work together to further SHRM’s ability to

Strategic RelationshipHR and management need to work together to further SHRM s ability to have an impact on decisions.The relationship between Corporate HR and Top Management can be motivated by the following factors:

Reporting relationships - In agencies where there is a direct reporting relationship between the head of HR and the head of the agency, HR generally has a more visible role in agency decision-making.Management advocates - In agencies where there is a strong HR advocate in senior management, HR has more involvement in the agency decision-making.g , g y gCredibility - HR representatives who are formerly program managers tend to earn more credibility from the other managers. Culture - In some agencies the recognition that its people are its mostCulture - In some agencies, the recognition that its people are its most important asset has traditionally been part of the culture. Value - In all cases, HR has to bring value to the discussion in order to be considered a member of the management team


considered a member of the management team.

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How the HR office interacts with its line managers

Strategic RelationshipHow the HR office interacts with its line managersHR as Consultant: HR office has become more consultative. Rather than telling a manager he/she can or cannot do something, HR professionals are more helpful in finding solutions to HR issuesfinding solutions to HR issues.HR as Contributor to Mission Accomplishment HR help managers in terms of recruitment and staffing, employee development, and employee relations that managers would have difficulty doing it on their ownmanagers would have difficulty doing it on their own. HR as Strategic Partner: For HR to become more involved in line-level decision-making, managers would like the office to:

H t k l d f th i ti l i i dHave greater knowledge of the organizational mission, andGet more involved and innovative in broad, organizational HR issues that impact most on the organization, such as recruitment and workforce and succession planning.

H i l d i ki d i i b t HRHow managers are involved in making decisions about HR programs -HR/management council should be established to allow them get together periodically to discuss human resources issues and thus get to real integration of managers into the HR program decision making process


managers into the HR program decision-making process.

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With the developing relationship between HR and

AccountabilityWith the developing relationship between HR and management, both at the top and line levels, accountability should become a shared responsibility.should become a shared responsibility.Managers are making more and more HRM decisions while the HR staff is becoming more involved in broader organizational g gissues. This means that both the HR staff and managers are ultimately accountable for effective, legally compliant HRM.Managers are accountable for the business results achieved th h d h t th HR t ff ithrough good human resources management, the HR staff is accountable for HR compliance, and both are accountable for the overall effectiveness of the agency HRM program


the overall effectiveness of the agency HRM program.

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Fully integrate human resources management into the business

Where do we go from here?Fully integrate human resources management into the business planning process.

Agency executives need to recognize the value that HR can impart to discussions about agency activities, priorities, and goals. In turn, HR leaders need to understand agency mission needs and be able to contribute substantive, creative solutions to meet these needs.

Focus on organizational activities that assist in agency decision-making.

HR needs to develop strategies based on actual business needs whichHR needs to develop strategies based on actual business needs, which will require involving management in the planning process. In addition, it must address concerns about the workforce capabilities of the future, such as workforce planning, succession planning, training needs assessments, skill gap analyses, etc.


Measure HRM outcomes

Where do we go from here?Measure HRM outcomes.

HRM measures should evaluate the impact these activities have on the organization as a whole. Information from these measures should then be input for agency wide decisionsfor agency wide decisions.

Advance the collaborative working environment between HR and management.

HR has to have a strong, collaborative working relationship with top agency and line management.HR needs to build its own internal competencies to deal with organizational p gissues. HR needs to educate itself on agency and program missions, to be able to offer creative and innovative alternatives and solutions to organization wide issues.creative and innovative alternatives and solutions to organization wide issues.

To achieve SHRM, all must work together.


Strategic Human Resource ManagementStrategic Human Resource ManagementSHRM

THANK YOUTHANK YOUDr. Abdelfattah ABUQAYYAS

Telecom ConsultantCITC - KSA

Telephone: +966 1 461 8076F 966 1 461 8206Fax: +966 1 461 8206

Mobile: +966 556642230


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